Columbia, SC — A five-year investigation into a widespread scheme to fraudulently obtain COVID-19 unemployment benefits has led to guilty pleas from 29 of 31 defendants, the U.S. Attorney’s Office for the District of South Carolina announced today. The fraud resulted in $4.9 million in losses to the federal government.
The scheme, led by inmates at the South Carolina Department of Corrections (SCDC) and assisted by their family members and friends, involved the use of stolen or voluntarily provided personal information, such as Social Security numbers and birth dates, to file fraudulent claims for unemployment benefits.
Some inmates exchanged their details for a share of the benefits, while others were unaware their information had been used. In addition, the scheme involved extorting personal data from individuals outside the prison system.
One of the primary methods used by the inmates, known as “Johning,” involved inmates using contraband cell phones to impersonate young individuals, luring victims into sending compromising photos. The inmates would then extort money or further personal information, including Social Security cards and driver’s licenses, by pretending to be law enforcement.
Once the benefits were approved, the funds were collected by non-incarcerated defendants, who then distributed the money via ATMs, wire transfers, or mobile payment apps such as Zelle, Venmo, Green Dot, and Cash App. The conspiracy spanned across multiple states, including Arizona, California, Missouri, Nevada, New Jersey, North Carolina, Pennsylvania, and South Carolina.
Among the 31 defendants, Jessica Ann Howell has passed away, and Christine Hankins remains a fugitive. The investigation is ongoing.
